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International Dairy Agreement is one of the four plurilateral agreements resulting from
the Uruguay Round negotiations. Unlike the other WTO agreements, membership in the
plurilateral agreements is limited to those governments which have explicitly accepted
them. The International Dairy Agreement is a slightly modified successor to the
International Dairy Arrangement, which had been in effect since 1980. However, due to
expectations that the results of the WTO Agreement on Agriculture will address some of the
concerns which initially led to the establishment of the International Dairy Agreement,
and the fact that emerging technologies have opened other avenues for information
exchange, a number of members of the previous Dairy Arrangement decided not to join the
new International Dairy Agreement. The new Agreement currently has 12 signatories (the
European Community counting as one), not all of which have yet fully ratified their
The International Dairy Council considered that the limited membership in the
Agreement, and in particular the non-participation of some major dairy exporting
countries, made the operation of the minimum price provisions untenable. The minimum
prices have been suspended until 31 December 1997. The International Dairy Council will
continue to review the world market situation for dairy products at its regular meetings.
Note to Editors:
International Dairy Agreement entered into effect on 1 January 1995. It replaces the
International Dairy Arrangement, which had operated since 1980. As of 16 October 1995, the
following were parties to the International Dairy Agreement: Argentina, Bulgaria, the
European Community (15), Japan, New Zealand, Norway, Romania, Switzerland and Uruguay.
Brazil, Chad and Hungary have signed the Agreement but not yet ratified their membership.
objectives of the Agreement, like its predecessor, are to advance the expansion and
liberalization of world trade in dairy products under as stable as possible market
conditions, on the basis of mutual benefit to exporting and importing countries, and to
further economic and social development in developing countries. In adopting these
objectives, the economic importance of milk and dairy products to many countries was
recognized, as well as the need to avoid surpluses and shortages and to maintain prices at
an equitable level. An International Dairy Council and a Committee on Certain Milk
Products were established to administer the Agreement. Previously three Protocols were
annexed to the International Dairy Arrangement; under the International Dairy Agreement
these have been combined into a single Annex on Certain Milk Products.
establishes minimum export prices for skimmed milk powder, whole milk powder, buttermilk
powder, anhydrous milk fat, butter and cheese. The minimum export prices are fixed for
defined pilot products and take into account the current market situation, dairy prices in
participating producing countries, the need to ensure equitable prices to consumers, and
the desirability of maintaining a minimum return to the most efficient producers in order
to ensure stability of supply over the longer term. The Decision of the Council on 17
October 1995 suspended the operation of the Annex, thus the minimum price provisions.
Minimum export prices for particular products (butter and butter oil) have been suspended
in the past for limited periods of time.
by the Council also suspended the operation of the Committee, whose function was to review
the application of the Annex. The Council will continue to make an evaluation of the
market situation twice a year based on background information prepared by the WTO
Secretariat and review the functioning of the Agreement.